Technical Analysis Notes -1-

Support and resistance is one of the most used concepts in technical analysis.If we consider the bull market the highest point before pull back is resistance and lowest point before going up is support and the reverse is true for the downtrend.

Now we know the the support and resistance but how we identify them?One thing to remember is that support and resistance levels are not exact numbers they are generally an area.If you see price goes a level and turn back over time there are a high change for that level to be a support or resistance.,

Finally we can talk about some properties of support and resistance areas.
1-When the price broke resistance, that resistance could be support.
2-When a support or resistance level breaks, the strength of the follow-through move depends on how strongly the broken support or resistance had been holding.
3-The more often price tests a level of resistance or support without breaking it, the stronger the area of resistance or support is.